Job Discussion Forums

GreenCardigan · Joined: 05 Oct 2006 Posts: 50 Location: Japan

Hello to everyone on Dave�s ESL website. I�m a first-time poster and hope to become a regular contributor.

I have a question regarding Canadian taxes for other ESL teachers in Japan or Canadians who might know.

I came to Japan on the JET Programme last year and I�m in my second year now. From my understanding, Canadian JETs do not have to pay taxes on Japanese income, as they pay their taxes to the Japanese government. It did stress in one of those JET mailouts that the previous statement was only applicable for Canadian JETs who file their taxes. This leaves me wondering what the penalty is for not having filed my taxes before the April 31st deadline. Does anyone know what the penalty is for not having filed? Or even if there is one?

To add a little context, before I came to Japan I worked in Canada but I didn�t earn a lot of money. In fact, I�m probably in line for a rebate from the government.

Any comments, suggestions, or advice are appreciated. Thanks guys.

GreenCardigan,

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

If you are in for a rebate from last year's income in Canada, do your taxes. If they have to pay you, they don't care how long you take, the longer the better.
Have you looked into non-residency? Do a search about it here. Much to read. If you will be here in Japan for 2+ years, do the paperwork and become a non-resident.
Do a search on it and then come back to ask more questions.

24601 · Joined: 25 May 2006 Posts: 75

Before you rush off to become a non-resident, be aware coming BACK to Canada and re-establishing residency and getting your health care and such set back up is a serious PITA. There are also advantadges to simply not letting the govt know you are working outside the country. Investigate all options.

JimDunlop2 · Joined: 31 Jan 2003 Posts: 2286 Location: Japan

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

I am currently on my second stint as a non-resident. Yes, becoming a non-rezz is no ball of fun, but it could save you thousands of dollars.
If I wasn't a non-rez, I would currently be owing the Cdn gov't about $60K in taxes.

J. · Joined: 03 May 2003 Posts: 327

Gordon, it's interesting that you have done this twice. Does that mean you have filled out the paperwork twice and what do you mean it was no fun? Any light you could shed would be helpful. I thought it wasn't necessary to actually do the paperwork as long as you filled all the requirements of a non-resident.

I will tell everyone that Canada immigration asks questions now such as "Are you a non-resident?" and "Do you pay taxes in Canada or Japan?" when you visit Canada. They even ask if you are visiting family. (One of the requirements of non-residency is that you don't have "too close" ties with immediate family, whatever that means.) Since they have computers in front of them I assume ( maybe I'm being paranoid) that they are recording the answers. In any case they have records of your visits. Just to make people aware that immigration may be recording information that could later be used to try to deny non-residency. Another problem I've heard about is that later they are allowed to reverse their decision, even if you fill out the paperwork, and qualify. Seems they have their cake and eat it too..big surprise. There sure are a lot of tricky rules about what you can and can't do.

Does anyone know if the application forms are available online so I could take a look at them?

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

craven · Joined: 17 Dec 2004 Posts: 130

I'm on my 3rd year of JET, after 2 years of doing private teaching. I called Revenue Canada about filing taxes during my early years here, and again when I started JET. I had to file a tax return my first year, because I arrived in Japan in October so I still had outstanding time in Canada to account for. However, so long as you pay taxes on all income earned in Japan, you are not required to file a return. If you have ANY income-generating items in Canada (investments, property, etc), then you MUST file a return on all revenue you take in from these sources. But as far as your salary here is concerned, you're in the clear. Make sure to keep all of your statements of earning and tax receipts in case you do get audited later in life.
If you're owed money, I would file a return for sure, particularly if you are in your early stages here!
Glenn, why would you have owed 60k in taxes if you had not filed as a non-resident?

craven · Joined: 17 Dec 2004 Posts: 130

Oops, sorry, Gordon, not Glenn Embarassed

getting my posts mixed up!

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

J. · Joined: 03 May 2003 Posts: 327

Thanks, Gordon. I will take a look at the website. I think I have already cut most of my ties, but frankly I don't trust Revenue Canada. (If I were you I wouldn't talk about how much I might owe in case they find a way to try to collect.) :( Just remembering the case where there were disputed taxes and the agents entered the house and took everything including the children's stuffed toys (as they were crying and trying to hold onto them). I'm sure they must have been worth about 1 or 2 dollars, huh? Tells us something about who we're dealing with, I think.

But nice to know we can visit relatives. :)

craven · Joined: 17 Dec 2004 Posts: 130

I see...was this before Canada signed a tax treaty with Japan? I was under the impression that with the treaty, you do not have to pay Canadian taxes on any income earned in Japan, provided you have paid Japanese taxes on it. Am I wrong on this?

Gordon · Joined: 28 Jan 2003 Posts: 5309 Location: Japan

craven · Joined: 17 Dec 2004 Posts: 130

I see...now I'd taken it to mean that all income earned in Japan was exempt from Canadian taxes, so long as you paid the proper taxes on it in Japan. I was under the impression that before the treaty, you had to pay the balance. That was what revenue canada told me when I called them too...any good web references on this?
I'm heading into my 5th year here.

GreenCardigan · Joined: 05 Oct 2006 Posts: 50 Location: Japan

Thanks to everyone who responded to my question regarding Canadian taxes, and especially to you, Craven. Your posts were especially helpful.

I've decided that I won'T bother doing my Canadian taxes while in Japan. I'll do the paperwork when I get back home next year.

I doubt that I could have owed any money to the Canadian Government before I came to Japan last July. I was working a low paid job and made well under 20K.

I'll take care of business when I get back.

Thanks for the responses, guys.